Cache memory is used to store frequently used data/instruction to improve the performance. A processor may have up to 3 level of cache i.e. L1, L2 & L3 cache. Out of these three L1 is fastest & L3 is slowest. The L1 cache typically ranges in size from 8KB to 64KB and uses the high-speed SRAM (static RAM) instead of the slower and cheaper DRAM (dynamic RAM) used for main memory. L2 cache comes between L1 and RAM(processor-L1-L2-RAM) and is bigger than the primary cache (typically 64KB to 4MB). L3 cache is not found nowadays as its function is replaced by L2 cache. L1 & L2 cache sits inside the processor. L3 caches are found on the motherboard rather than the processor. It is kept between RAM and L2 cache. Size of L1 & L2 is decided by performance requirement of your system.

It is very rare, you find L1 & L2 running at same frequency (ARM Cortex A7 is exception where both L1 & L2 runs at same frequency as it is a small core).

1. L2 is bigger in size & bigger memories have more access (read/write) time. Even with high speed memories it is difficult to meet timing due memory access time. Also, logic talking to L2 memories will be sitting far from L2.

2. Another reason is the heat dissipated by the memories running at such a high speed will be quite high. Your chip package may not support this much heat.